3 Top US Equity Funds for America Bulls

Investors are divided over the prospect for US equities - are stocks overvalued or will the strong economy continue to drive positive returns? For the bulls, here are the top funds

Lena Tsymbaluk 10 March, 2016 | 12:41PM
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The Morningstar GDP forecast for the US economy in 2016 isn’t much different from forecasts for the prior three years, namely 2% - 2.5%. Morningstar economist Robert Johnson believes that growth will again be driven by the consumer, with little help from the other major components of GDP.

We have highlighted three funds where investors can gain exposure to this market which is likely to remain a large and important part of most investors’ equity exposure throughout 2016.

Best Performing US Funds Over Three Years      

Vanguard US Opportunities invests mainly in US stocks, with an emphasis on companies that are considered to have prospects for rapid earnings growth. The fund’s investment manager, PRIMECAP Management Company, uses fundamental research to identify stocks that are expected to outperform the market over a three- to five-year time horizon and that are available at attractive prices relative to their fundamental values. Investors should note that effective March 3 2014, the fund is closed to all new investments.

T. Rowe Price US Large-Cap Growth Equity has been successfully managed by Rob Sharps since its 2003 inception. The manager is supported by an analyst pool of 100 sector specialists who conduct detailed fundamental analysis. The strategy is based on the belief that long-term growth in earnings and cash flows drive returns, and that rapid growth is often fuelled by innovation. The fund has set itself apart not only though it’s excellent performance track record, but also through its active share which is significantly higher than peers.  The fund’s investment philosophy hasn’t changed in two decades and has survived the test of time. Morningstar rates the fund Silver.

T. Rowe Price US Blue Chip Equity has been managed by Larry Puglia since its inception in 2003 and has a solid, 21-year track record at its US-sold counterpart. Beyond benefiting from an experienced manager, for stock selection the fund draws on T. Rowe Price’s analyst team. Puglia looks for companies with sustainable earnings, high returns on invested capital, free cash flow growth, and management teams that will drive further growth. The fund is not simply a compilation of steady blue chips as it also includes fast-growers. Morningstar rates the fund Silver.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
T. Rowe Price US Blue Chip Eq A USD91.94 USD1.30Rating
T. Rowe Price US Lg Cap Gr Eq A USD83.48 USD1.18Rating
Vanguard US Opportunities Inv USD Acc1,683.72 USD-1.26Rating

About Author

Lena Tsymbaluk  is a fund analyst at Morningstar.

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